U.S. 54.5 MPG Fuel-Economy Standard May Cost $157 Billion

[Javaman]

http://www.bloomberg.com/news/2011-11-16/doubling-fuel-economy-may-cost-2-000-a-car-157-billion-u-s-draft-says.html

A proposed U.S. rule requiring automakers to double average fuel economy of vehicles to 54.5 miles per gallon by 2025 may cost $157 billion, two agencies said in a draft.

The standard would add an average of $2,000 to the price of each new passenger vehicle sold by 2025, the National Highway Traffic Safety Administration and Environmental Protection Agency said in a proposed rule posted today on NHTSA’s website. Benefits of $419 billion to $515 billion in fuel savings would offset the costs, the highway agency wrote.

“It’s probably a good thing long-term,” Mark Reuss, president of General Motors Co. (GM)’s North America operations, told reporters today at the Los Angeles Auto Show. “There’s a blend here of things that people will and won’t pay for. It’s our job to make sure we offer what people will pay for and keep offering technologies at an ever-decreasing cost.”

The proposed rule requires annual fuel-economy increases of 5 percent for cars. Light trucks like pickups and sport-utility vehicles can raise fuel economy at 3.5 percent for the first five years the rule will be in effect. Then, unless regulators decide differently in a midterm review, trucks also would have to boost fuel economy by 5 percent a year.

Today’s draft detailed a proposal agreed to in July by President Barack Obama’s administration and automakers including GM, Ford Motor Co. (F), Honda Motor Co. and Toyota Motor Corp. (7203) Daimler AG (DAI) and Volkswagen AG (VOW) were among automakers that didn’t sign on and weren’t part of a ceremony in Washington where Obama touted the rule as part of his plan to reduce the use of imported oil in the U.S.

more at link...

[BadgerKid]

1. I could see most vehicles having some green features.

The three features that readily come to mind are regenerative braking, auto idle-off, and electric A/C.

It seemed to me every manufacturer is moving toward having one or two hybrid models.

[txlibdem]

14. I think you've got something there

If all vehicle models had just those 3 technologies it would save millions of gallons of gas/diesel.

Then the auto makers could produce however many fully electric vehicles needed to reach the fleet goal of 54 MPG. It's doable... and moreover the auto makers ASKED for tougher standards. I think they realize that they need a common goal (or is it a kick in the rear) to achieve great improvements.

[no_hypocrisy]

2. Shareholders don't want long-term benefits. They want their money now.

[happyslug]

5. When the Highest tax rate was 90% with a 50% disregard for LTCG, they wanted it long term

LTCG- Long Term Capital Gain, something held for more then Five Years. This was the Marginal tax rate for the Richest Americans from FDR till Lyndon Johnson (Under Johnson's administration Congress finally accepted JFK's proposal to drop it to 70% top marginal rate, where it stayed till Reagan dropped it to 35% and dropped the 50 % Disregard for Long Term Capital Gains).

Since Reagan dropped the rate from 70% to 35% and eliminated Long Term Capital Gain (Which has come back in a limited degree, or at least the name has for a deduction) investors have gone from wanting to know what the company will do with their money over the next Five to Ten years to what the stock value will increase this year.

The reason for the switch is under the 90% tax rate subject to a 50% Long Term Capital Gain, if you earn a million Dollars in 1960, 1/2 of that million, if it was the result of an investment made prior to 1955, was NOT counted as Income, i.e. you paid 90% tax on only 1/2 million, the other 1/2 million was tax free (Effective top marginal rate was in effect only 45%. On the other hand if the investment was do to Stock Market Manipulation (i.e. Speculation NOT investment), given that no one held such stock for five years, any "gain" would be 90% to the Government, 10% to the speculator.

Johnson dropped the top rate to 70% but it was still effective for the Long Term Capital Gain deduction remained at 50%, but only for investments held for Five years or longer. Reagan Killed this, and the present emphasis on short term gain became the norm, for the simple reason the tax rate was the same if the gain was do to long term investment or such market manipulation/Speculation.

Thus you see the switch from Long Term Planning, which was the norm in the 1970s, to looking at the market value year by years, which became the norm since Reagan. What we need is to return to the tax rates of the 1950s (adjusted for Inflation) to discourage short term thinking. Such short term thinking is NOT good for the Country.

P.S. I should point out the 90% tax rate and 50% disregard was passed under Hoover, for even Hoover saw the problem with short term speculation on the stock market.

[Initech]

9. Fuck the shareholders. We need this badly.

[Viking12]

3. What a fucked up, misleading headline. U.S. 54.5 MPG Fuel-Economy Standard May Save $262-358 Billion

[RC]

4. There is NO mention of ethanol in the article.

How would this affect the mileage, as if we don't already know.
There is a push for higher ethanol content in gasoline, 15%, 30% and even for 85% only, from some. This is not good for mileage. What will the new regulations do to the engine power output? With all the engine driven accessories, that will require bigger engines to off-set the power loss.
There is only so much energy in a given unit of gasoline and even less in gasohol. Something gotta give.


Edited to ad note for post #1. Power for electric A/C ultimately comes from the engine. At best it's a wash.

[madrchsod]

6. 1990 ford 150--$10,500

2000 ford 150-$15,000

2011 ford 150-$27,000

actually those figures are under the average price increase of one the most popular selling vehicles in the usa.

[GeorgeGist]

7. Way to phuck up a story.

Headline should read:

U.S. 54.5 MPG Fuel-Economy Standard May Save $358 Billion

[Gregorian]

8. Oh my god, it might cost the equivalent of four Navy destroyers.

[Initech]

10. Exactly no matter what the populace always gets screwed in favor of new war toys.

:banghead:

[XemaSab]

11. Or one illegal war in Central America

:banghead:

[Hutzpa]

12. Angela Keane

you are an asshole for posting that headline, it is misleading and should be thrashed.

[chaska]

13. HERE'S the answer.

http://www.ecofriend.com/entry/edison2-wins-5-million-automotive-x-prize-for-fuel-efficiency/

Forget electric, which is anything but green. This is the transitional step to the bicycle. And that - make no mistake - is where we're going. Oil is going, going.....